Tanzania: Health Insurance to get Boost

Tanzanian micro-health insurance start up Jamii is heading to the global final of the Seedstars World competition next year. But the trip to Switzerland is just one part of an international agenda that will see the start-up launch across Africa.

Jamii, a mobile micro-health insurance product for the low income and informal sector, was named the winner of the Tanzanian leg of the Seedstars competition over the weekend, and will now head to Switzerland to pitch for up to US$1 million in investment.

But it will also be expanding across Africa, on the back of grant money from the Bill and Melinda Gates Foundation the US$250,000 it already has committed of its US$500,000 funding round. Jamii will launch in five other African countries in 2017, namely Kenya, Uganda, Ghana, Nigeria and South Africa.

The startup, which launched in January 2015, has built a mobile policy management platform that performs all the administration activities of an insurer, and allows users to access cheap insurance via USSD.

Jamii has formed strategic partnerships with Jubilee Insurance and Vodacom Tanzania to enable mobile premium collection and a cashless facility from over 400 hospitals.“These enabled us to just insurance administration costs by 95 per cent, enabling us to launch insurance policies from as low as US$1 per month for the low income population,” said founder and chief executive officer (CEO) Lilian Makoi.

It has proven popular, with almost 8,000 Tanzanians using the platform since it launched, and the team growing to include 98 agents and nine managers. The idea for Jamii was born after Makoi witnessed a close friend lose her husband because they could not afford US$25 to access medical help.

“It was a wake up call for me. This pushed us to study the market more and understand how big the problem was,” she said. And the problem turned out to be pretty large, with only 4.5 per cent of people in Tanzania having health insurance. While the middle income population can afford out-of-pocket healthcare financing, the rest of the population – 76 per cent of the total – are lack access to healthcare.

“Most of them are forced to take up loans and help from friends and relatives, or even forced to sell livestock and land to finance their medical needs,” Makoi said.

The uptake of the platform shows its benefits, and Jamii is hoping to impact around 200,000 people in 2017 through its planned re-launch, education campaign and marketing strategy. The concept will also be launching in other African countries.

“We are live in Tanzania and almost launching in Nigeria and Kenya. We plan to launch in the other three markets in 2017, before expanding to the rest of Africa in 2019,” Makoi said.

Jamii receives an agreed percentage commission for every activation that happens on its platform, with the insurer, telecom partner and agents taking a share for their roles. The startup is already generating revenue, but Makoi said the team is working on growing this. Educating people on the importance of insurance will be key to its success.

“Tanzania does not have the financial education it needs to have, causing a lot of difficulty when it comes to selling insurance to the people that we are targeting,” she said. “Lack of education has been our biggest pain, where the target market not only does not understand insurance, but also lacks trust in it and is reluctant to try it out.”

She said this required huge investment in educating people before they could pitch Jamii to them, but funding and partnerships were playing a part in making the process easier.

“Having the great partners we have in Jubilee and Vodacom, and having backing from active investors and likeminded donors, Jamii is enabled to exist in the market and overcome the challenges,” Makoi said.

“Partnering with strong brands like Vodacom and Jubilee addresses trust, while having a great product and team attracts funding.”

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